It appears that Millennials aren’t as tech-savvy and cyber-smart as many think they are. In fact, Millennials may be the easiest generation to scam, according to the BBB Scam Tracker, a crowd-sourced reporting tool.
Of those reporting scams to the BBB Scam Tracker, 34 percent between the ages of 18 and 24 failed to detect a scam and consequently lost their money. In comparison, 89 percent of seniors (ages 65 and over) were able to recognize a scam and only 11 percent reported losing money.
In many ways, this defies the stereotype of the technologically challenged grand-dad who unknowingly gives away his life’s savings to a scammer. And it can get unsuspecting, overly confident Millennials into financial danger if they aren’t careful.
Why are Millennials Vulnerable?
There are several different reasons why Millennials are sought by scammers. Here are a few reasons why Millennials may be more vulnerable to scams than many people would think:
- Optimism bias — Unfortunately, the stereotype that only elderly or uneducated individuals are scam victims perpetuates a concept known as “optimism bias.” Many Millennials are overly-confident that scams won’t happen to them, ironically making them more vulnerable to scams.
Meanwhile, many seniors are more aware of scammer strategies and have likely learned from their experiences. Seniors also tend to receive more scam warnings than Millennials, which can put Millennials at a disadvantage. But scammers don’t discriminate — people of all ages should be aware of scam red flags and take precautions.
- Ignorance of scams — Research indicates that many Millennials are unaware of the dangers of phone scams. For example, First Orion determined that Millennials are almost three times as likely to lose money from a phone scam as baby boomers are.
Unfortunately, scammers have noticed this and are making more scam phone calls. People are four times more likely to receive a scam call in the most recent week today than they were in 2015, according to First Orion. Also, scammers are now more likely to impersonate the IRS in a phone call, text or email, which can trick Millennials into giving up their personal information.
- Too comfortable giving away personal information — Many Millennials may not bat an eye as they give away personal information to supposedly secure websites. However, many websites are vulnerable to security breaches, and these have increased in the past year. This allows scammers to gain access to physical addresses, email addresses and Social Security numbers.
Scammers typically use this information to gain Millennials’ trust. In fact, according to a survey conducted by the IRS, Millennials are six times more likely to fall for phone scams if the caller can verify the last four digits of their Social Security number. Remember that the IRS doesn’t reach out to taxpayers via phone calls.
Solutions to Stay Safe
Here are a few things you can do to recognize scams when they’re happening and avoid becoming a victim:
- Report recorded scam calls to the Federal Trade Commission. If you, your child or your grandchild receive a recorded scam call, you should hang up and report the call to the FTC immediately. This will help avoid further scam calls and hopefully also prevent more scams from happening.
- Don’t trust caller ID. You can’t always trust your caller ID. Many scammers can fake caller ID to make the call seem like it’s coming from a legitimate source. Any time you’re discussing personal information or want to make a financial transaction over the phone, make sure it’s with someone you trust. It’s usually smart to only do this if you initiate the call.
- Raise awareness of the problem. In a study conducted by the Better Business Bureau, 80 percent of respondents said that if they knew about different scam types and understood common methods used by scammers prior to being targeted, they might not have been fooled. The more aware Millennials are of scams, the less likely it is they will get duped by scam phone calls.
High Cost of Fraud
The problem of fraud and scams appears to be getting worse instead of better. According to the BBB Institute for Marketplace Trust, scams affect one in four North American households each year, costing individuals and families $50 billion.
By sharing your stories and being skeptical and smart, you and your kids and grandkids can help stop scams before they happen.
Please contact us if you have any questions about avoiding financial scams.